HBO CEO: "...an internet-based model [for TV] is just a fad"
forbes.com
forbes.com
If HBO were independent you wouldn't see these stupid comments. It's in HBO's best interests to get their content seen by as many people as possible. That, however, is not in the best interest of Time Warner.
HBO Go is largely a joke. Not only does it require a cable subscription, it can't be used on the go. There is no offline caching of shows and to stream shows it requires a pretty strong connection: http://interchangeproject.org/2012/05/10/why-is-hbo-go-not-a...
My bugaboo in this area is international football. Getting Premier League games in the states is a real pain. I'm sure there's equally entrenched interests there.
You can't just buy the sports, you have to buy a bunch of other stuff to get the sports. It's very annoying.
[1] You need a tv licence if you use a TV as a TV, even if you never make use of BBC content.
In contrast, I purchased the latest episode of Sherlock in 1080p for this trip. It looks amazing on the iPad, and I'll be able to watch it on the plane or anywhere else.
If this thread is still active, I'll report back tonight on how HBO Go works on my hotel's wifi. If HBO Go would just let me cache a few shows this wouldn't be an issue.
And forget about watching any of these episodes on my plane flight.
Maybe I'm asking too much from an app with Go in the name.
The issue here is actually that the cable companies (TWC included, now as one of many clients of Time Warner's) provide huge dollars in a lump sum kind of way. The internet is still not a proven business model for distributing shows profitably.
While I agree with others in this thread that an a la carte model is the correct one and would likely work, there is very little middle ground for them (HBO, TW etc.) in between selling their shows to cable companies and going completely independent and distributing through the internet. As soon as they start doing that the cable companies will stop paying for their shows, and then at best there will be a long period of time while people switch over to consuming everything over the internet. Imagine how long it's going to take IE8 to disappear due to the fact that you can't upgrade to IE9+ w/o Vista+. Now imagine the upgrade I have to do is swapping out a cable box for a computer. Will you survive that gap, or will cable companies, wanting to continue to capitalize on the networks they've built, simply replace your content with someone else's?
I mean if they're going to charge me $5 to watch a mediocre movie i'm going to pay them precisely $0 a week. If they charge me $1 to watch a movie I will probably watch 5 movies a week which gets them 5 of my bucks. They just need to go all in and stop messing around.
You do not like the answer.
The point I am trying to make is that I shouldn't have to take 10 steps to watch my favourite shows. It should be a two step process. Pay -> Watch. Easy.
It is just crazy how many conditions they impose instead of just taking my money, then complain when people who are less patient than me just go ahead and pirate the damn thing.
Purchasing a single tv show or movie is the same price as a few months of Netflix, though.
More like; I buy a loaf of bread and I am never around to eat it. The whole loaf goes mouldy so I don't buy it. My friend gives me a piece of bread when I want it at 12 am, I would GLADLY pay for it but he doesn't accept money and he only complains.
You probably meant "definitely" or "certainly" comparing "apples to oranges". It's an expression, it's not literal unless he LITERALLY was comparing apples and oranges, where an apple is a fruit from an apple tree, and an orange is a fruit from an orange tree. Such a comparison may sound like "most apples are red and fat around the middle, most oranges are orange and evenly round".
You know, I think that's what he actually meant. In fact, you knew that to and so did everyone else.
Something that often annoys me about the "piracy" debate is that the debate is very difficult to have, since there is very little to compare it to. No, it's not like stealing a car, but it's also not like making bread from scratch, and it's also not quite like sharing a (physical) copy with your friend, or like making a physical copy and handing that around (it's also not really like piracy, which is why I put that word in scare quotes)
A better analogy would be that you wanted to buy a loaf of bread, but the grocery store forced you to also buy hot dog and hamburger buns with it along with some bagels. Say you're a vegetarian or don't like hot dogs or hamburgers, and you'll never use them, but you have to buy them anyway.
Ultimately, the issue here is that content producers don't have simultaneous releases of this content online (for a worldwide standardised fee) because they don't want to.
Selling and delivering a virtual product in Australia doesn't cost significantly more than it does in the USA.
I would gladly pay for half a book after I'm done reading the half that i read, but stores don't sell me half a book, for half the price.
So instead, I borrow the book from my friend, read half of it, and then return it. The store doesn't get any income from me at all.
The grocery store will not sell half a loaf because they cannot figure out how to keep them fresh enough to sell them. They don't try hard to sell half a loaf and they basically tell the public to accept whole loaves as a fait accompli.
A the growing demand for half loaves meets a innovative group of people who found a way to deliver fresh half loaves to people. They sell them on the city streets -- without a license -- near the grocery store. Customers are happy again.
The grocery store finds out they have been losing revenues to the street dealers and the engineering efforts they developed for delivery are based on knowledge in the public domain. Instead of using this knowledge to serve their customers the fresh half loaves they want, they try to stop the street dealers from selling because they operate without a business license.
Even if everyone in the USA agrees with you, Bell won't. They have far too much money invested in TV broadcasting technologies, and too little tied up in Internet infrastructure. There's no real upside to them providing you the content online, because not only will they'll lose their broadcasting revenue, but you'll fill up their oversubscribed tubes, making their internet services more costly to operate. A token fee for the program isn't going to offset that.
All i m saying, and i think most people agree, is that their cost/benefit/profit analysis of the situation hinges on the false assumption that consumers have no way of obtaining the content in their own way (via piracy or waht not). and this is increasingly not the case.
I do agree that the time will eventually come, but it is wholly up to the consumers. So long as we continue to fund the TV infrastructure in a big way, there is no incentive for the business to change.
Make a Netflix style distribution system, allow users to subscribe a la carte to a fixed number of channels on a tiered system (i.e. I can select up to 15 channels for $29.99 a month or 30 channels for $59.99 a month), and make it all on demand. The infrastructure is there, the tech wouldn't be that hard to set up, and it would make a BOATLOAD of money for both the networks and the operators.
Honestly, it sounds like an ego game. They don't understand how these things work so they go on the defensive as opposed to learning and improving their business. Sad.
Cable is increasingly becoming the have's/have not's.
Only if by "boatload" you mean one of those little toy boats that floats in the bathtub. Last year, NBC, the lowest rated broadcast channel, reported $4.2 billion in ad revenue (which represents a substantial decrease from the year before). At the top end, CBS reported $6.3 billion in ad revenue. (Source: http://adage.com/article/mediaworks/2010-rebound-broadcast-t...) HBO clocked in at just over $1 billion (estimated, final numbers pending) in revenue for 2011. (http://www.hollywoodreporter.com/news/hbo-top-1-billion-inte...) In order for a la carte to generate the same amount of revenue for a single broadcast channel, at say, $2/month, NBC alone would need 175 million subscribers, while HBO would need nearly 42 million subscribers (or roughly 1/2 again its current subscriber base).
It's not an ego game, it's basic arithmetic. Internet streaming may be the future, but it won't be the present until it gets a lot more expensive.
but the point is to make it cheaper. If this model can't be viable until its just as expensive as the cable model, then whats the point?! Gawd damn.
"How far off are we from a big movie being released simultaneously in theaters as well as over every platform available? And what will be the model for the release of the movie on the platform?"
"There is a bunch of companies and investors that put up your local multiplex. Lately they've been trying to make the place cleaner, the screens to be crisper, you've got hi-def. And that creates a certain viewer experience to go to the theater and see it that way. So as we think about the fact that can you release simultaneously what happens if you do that, we are all trying to be as thoughtful as we can about doing this in a way that does not undermine the quality of the theater experience. Not take away all the business..."
"You still haven't answered my question."
"Right... so that's one answer... the other answer is if you delay a while to give the theaters a chance to make a long run sell on tickets, what you're doing, and you see it all over the world, is you create gaps for piracy where..."
So there you go.
These guys aren't ignorant, they are maxing out profits. Not everyone is on Hulu yet. This is a really big country and the economics don't make sense for them yet.
He also directly disagreed with the HBO CEO by saying HBO Go "is working" and: "some of the connections where you try to sign on are not as good as they should be and that's what we've got to fix"
You cannot help but laugh at such a comment. This is anecdotal evidence but increasingly I've noticed people connecting their flat screen TV to their computer and use that as their main source of media. And these are people that are not technical in the least.
Exclusivity is another name for rent-seeking. HBO has every right to publish (and not publish) its content in the manner of its choosing, but I don't have to like it.
I bought the Game of Thrones books instead; which I was able to do, at physical and virtual locations, individually or in a boxed set, at a fair and reasonable price, at my leisure. Oh, and I can resell them after I've finished reading them.
Funny, that.
(Shrug) All they have to do is ask. It's as if they don't want to be able to sell directly to their viewers.
Other publishing industries are frantic at the thought of middlemen like Apple and Amazon owning subscriber relationships. Yet HBO and Showtime seem to actively prefer it that way. I don't get it... don't they understand the risks of putting all of their eggs in the cable provider's basket?
Broadband internet requires a subscription with a cable company, telecom, or DTH satellite operator.
An "internet-based model" has no impact on the supply chain. Cable companies, telecoms, and DTH satellite providers still sit between the content providers and the consumer.
Which, for the purpose of watching Game of Thrones, includes everybody who does not live in the US (and the UK for Game of Thrones, since it broadcasts on Sky the day after).
That's roughly 6.6 billion people "without cable access" for the purpose of watching GoT, even taking a third of that to account for people who have high-speed internet access and understand spoken english reasonably well you're still talking about a good 2 billion people who can see the series's hype online and have no way to watch the show legally while it is hyped and they can discuss it with other fans.
It always amazes me when dictators who succeed via coup d'état think they'll live forever.
http://www.telegraph.co.uk/technology/news/7874307/Prince-th...
"HBO co-president Eric Kessler has said he thinks the move away from traditional television to an internet-based model is just a fad that will pass – a 'temporary phenomenon' tied to the down economy. "
The only actual quote here is 'temporary phenomenon', which could have all kinds of contexts.
If I was an HBO shareholder I'd laugh while I sold.
At this point in time, it might make more economic sense for HBO to ignore the Internet. Although, I certainly hope they're planning for the future. And if they are, it would still be foolish to let the cable companies know that.
I'm willing to bet that he actually believes this.
The studios should be hiring engineers and UI folk; not lawyers. Time Warner should buy the Pirate Bay and charge a subscription or download fee while improving the UI. Or simply offer downloads on their website.
College sophomores figured out the distribution model fifteen years ago. This is silly.
"There is no reason anyone would want a computer in their home."
I don't understand why media companies don't get it that future is Internet. iTunes and Netflix are shining examples of that. What more evidence do they want?
Edit: Added Netflix reference
> I did make a number of statements and still make statements that people don't understand about computers, or delight in misquoting. A long time ago when the common knowledge was that PCs would run our lives in every detail, I said that if you stole something from the refrigerator at night you didn't want to enter this into the computer so that it would . . . mess up the computer plans for coming meals.
Like many have mentioned in this thread, People said similar things about computers in the past.
This is why its so important to understand what you are dealing with, every aspect of your business sometime you need to get down to the grass root levels to understand.
Merely 'I can get this job done by hiring techies' doesn't always help all the time.
For example: "There is no reason for any individual to have a computer at home" (Ken Olsen, Digital Equipment Corporation).
That thinking has worked out real well for newspapers.
How do you solve that?
Netflix or some other company needs to become strong and break them.
I think there is a world market for maybe five computers." -- Thomas Watson, chairman of IBM, 1943. "Where a calculator on the ENIAC is equipped with 18,000 vacuum tubes and weighs 30 tons, computers in the future may have only 1,000 vacuum tubes and weigh only 1.5 tons." -- Popular Mechanics, 1949 "I have traveled the length and breadth of this country and talked with the best people, and I can assure you that data processing is a fad that won't last out the year." -- The editor in charge of business books for Prentice Hall, 1957. "But what...is it good for?" -- Engineer at the Advanced Computing Systems Division of IBM, 1968, commenting on the microchip. "There is no reason anyone would want a computer in their home." -- Ken Olson, president, chairman and founder of Digital Equipment Corp., 1977. "640K ought to be enough for anybody." -- Attributed to Bill Gates, 1981, but believed to be an urban legend. "This 'telephone' has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us." -- Western Union internal memo, 1876. "The Americans have need of the telephone, but we do not. We have plenty of messenger boys." -- Sir William Preece, chief engineer of the British Post Office, 1876. "The wireless music box has no imaginable commercial value. Who would pay for a message sent to nobody in particular?" -- David Sarnoff's associates in response to his urgings for investment in the radio in the 1920s. "While theoretically and technically television may be feasible, commercially and financially it is an impossibility." -- Lee DeForest, inventor. "The concept is interesting and well-formed, but in order to earn better than a 'C', the idea must be feasible." -- A Yale University management professor in response to Fred Smith's paper proposing reliable overnight delivery service. (Smith went on to found Federal Express Corp.) "Who the hell wants to hear actors talk?" -- H. M. Warner, Warner Brothers, 1927. "I'm just glad it'll be Clark Gable who's falling on his face and not Gary Cooper." -- Gary Cooper on his decision not to take the leading role in "Gone With the Wind." "A cookie store is a bad idea. Besides, the market research reports say America likes crispy cookies, not soft and chewy cookies like you make." -- Response to Debbi Fields' idea of starting Mrs. Fields' Cookies. "We don't like their sound, and guitar music is on the way out." -- Decca Recording Co. rejecting the Beatles, 1962. "Radio has no future. Heavier-than-air flying machines are impossible. X-rays will prove to be a hoax." -- William Thomson, Lord Kelvin, British scientist, 1899. "So we went to Atari and said, 'Hey, we've got this amazing thing, even built with some of your parts, and what do you think about funding us? Or we'll give it to you. We just want to do it. Pay our salary, we'll come work for you.' And they said, 'No.' So then we went to Hewlett-Packard, and they said, 'Hey, we don't need you. You haven't got through college yet.'" -- Apple Computer Inc. founder Steve Jobs on attempts to get Atari and HP interested in his and Steve Wozniak's personal computer. "If I had thought about it, I wouldn't have done the experiment. The literature was full of examples that said you can't do this." -- Spencer Silver on the work that led to the unique adhesives for 3-M "Post-It" Notepads. "It will be years -- not in my time -- before a woman will become Prime Minister." -- Margaret Thatcher, 1974.